2025 (3) TMI 266 - AT - Service Tax

Transportation services within mines classified as transport not mining services under sections 65A and 66F Finance Act 1994

M/s. BLA INFRA-GKMWPL (J.V) Versus COMMISSIONER OF SERVICE TAX, BOLPUR COMMISSIONERATE, WEST BENGAL

CESTAT Kolkata held that transportation services provided within mines cannot be classified as mining services for service tax purposes. The appellant ... Classification of services - mining services or not - transportation services provided by the Appellant within the mines - HELD THAT:- The appellant has rendered the activities of 'Transportation within the mines' and the said services cannot be classified under the category of 'Mining Services”. It is observed that the ld. adjudicating authority has classified the said transportation services with incidental loading, and confirmed the demand, under the category of 'Mining Services' on the ground that the said services are provided within the Mines. However, going by the scope of works under the contract and applying the principles of classification set out under sections 65A and 66F of the Finance Act, 1994, it is observed that the said services cannot be taxed under the category of 'Mining Services”. It is clear that the services are appropriately classifiable under the category of 'Transportation Services' on which the Appellant is not liable to pay Service Tax. Conclusion - The transport services are logistic services which are not understood as a mining activity in the common parlance. The activity of transportation is not understood as an activity in relation to mining of mineral, oil or gas. Transport services are 'post mining activity’ and hence, the transport services provided by the appellant cannot be classified under 'Mining Services”. The demand of Service Tax under the category of ‘Mining Services’ is not sustainable. Appeal allowed. The present Appeal was filed by M/s. BLA Infra BKMWPL J.V, Burdwan, West Bengal against the Order-in-Original No. 27/COMMR/ST/BOL/15 dated 17.11.2015 passed by the Ld. Commissioner of Service Tax, Bolpur, confirming the demand of Service Tax of Rs.51,72,152/- on 'Transportation of Coal' within the mining area under the category of 'Mining of Mineral, Oil or Gas Service'.The core legal issue in this case was whether the transportation services provided by the Appellant within the mines should be classified under 'Mining Services' for the purpose of Service Tax liability.The Appellant contended that the activities of 'Transportation within the mines' should not be classified under 'Mining Services' but rather under 'Transportation Services' as per the principles of classification set out under sections 65A and 66F of the Finance Act, 1994. They argued that transport services are logistic services and not directly related to mining activities.The Tribunal, after considering the arguments presented, held that the transportation services provided by the Appellant within the mines and outside should be classified under 'Goods Transport Agency Services' and not under 'Mining Services'. They relied on precedents such as Commissioner of C.Ex. & S.Tax, Raipur Vs. Singh Transporters and Ambey Mining Pvt. Ltd. Vs. Commissioner of S.Tax to support their decision.The Tribunal emphasized that transport services are post-mining activities and do not fall under the category of 'Mining Services'. They concluded that the demand of Service Tax under the category of 'Mining Services' was not sustainable and therefore set aside the demand, as well as the demands of interest and penalties confirmed in the impugned order.In summary, the Tribunal allowed the appeal filed by the Appellant, setting aside the impugned order and ruling in favor of the Appellant regarding the classification of transportation services for the purpose of Service Tax liability.